Americans Keep Racking Up Debt

Posted by
January 16, 2010

People, people, people, what are you doing? Why so much credit card use? Didn’t you learn your lesson in 2009? Come on people. It is possible to live without credit. Do you know that credit card companies make just as much from fees and interest rates on what you spend? Read this article.

Americans Keep Racking Up Debt
By Althea Chang, Mainstreet @ The Street.com

Credit card balances for some consumers have risen by more than 30% in the last half of 2009, according to one study, despite reports that some card holders did chip away at their debt last year.

According to the U.S. Consumer Credit Score Climate Report from Credit Karma residents of Indiana, Michigan, Oklahoma, Pennsylvania and Tennessee saw an increase of 30% on average in their credit card debt in the latter half of 2009.

Philadelphia had the highest debt increase nationwide at about 40%. Overall, Americans with credit cards saw their debt increase about 18%, Credit Karma reports.

And as debt levels went up, credit scores went down, Credit Karma found. Since July, credit scores have dropped two points. For the full 2009 year, scores were down six points to an average of 671 in a market where an excellent credit score of 740 may not get you the best deal on a credit card, mortgage or car loan.

After several months of paying down credit card balances, many consumers were forced to turn to credit cards towards the end of the year,” noted Credit Karma CEO Ken Lin in a press release. “Credit Karma anticipates consumers to return to frugality in early 2010 and that credit scores will continue to remain stable until the economy picks back up.”

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